Can a Tarnished Star Regain His Luster?

As Harvey Myerson tearfully tells it, not long ago he sat his two youngest daughters down in the living room of his apartment, high above Central Park, and placed before them a scrapbook chronicling his tumultuous legal career.

The nicest clippings in it also happen to be the most yellowed. They talk of ''Heavy Hitter Harvey,'' the gravelly voiced ''pit bull'' litigator who once took on the entire National Football League and nearly beat it, the man Fortune magazine once called a ''master of disaster'' for rescuing troubled companies from their legal problems. They also describe how, two years ago, he and Bowie Kuhn, the former commissioner of baseball, formed a law firm that would, as Mr. Myerson boasted, ''knock the socks off'' New Yorkers.

But many of the newer clippings are painful - too painful, he says, for him to read. They recount the ignominious collapse of Myerson & Kuhn and its falling out with Shearson Lehman Hutton Inc., its key client. They dismiss Mr. Myerson's universe as ''Harveyland,'' a fantasy world of exaggerated claims, appetites and rhetoric. In one recent article, in the American Lawyer magazine, a former partner calls him a ''pathological liar.''

Mr. Myerson said he told his children, ages 12 and 8, that both sets of stories are baloney, and that the truth lies somewhere in between. ''How would you like to have your kids read that their Daddy is a 'pathological liar'?'' he asked, dabbing his eyes with a napkin.

These are troubled days for the 50-year-old Mr. Myerson, who has just joined his fourth law firm in the last six years. In that time he, perhaps more than any other lawyer, has come to personify the two sides of modern corporate law practice: its glamour, visibility and profitability as well as its instability, riskiness and potential for treachery. Mr. Myerson staked everything he had for power, glory and success. His former partners claim he even dipped into the firm's funds to sustain his life style, thereby accelerating the firm's demise, a charge he denies.

After many years of obscurity, Mr. Myerson rode quickly to the top of his profession, consuming partners, homes, Rolls-Royces, racing cars, raccoon coats and art as conspicuously as he ingested his beloved Philadelphia cheese steaks. But his failures, too, have been colossal. He was a partner in the two biggest law firms ever to file for bankruptcy: Finley, Kumble, Wagner, Underberg, Manley, Myerson & Casey, once the nation's fourth largest law firm, filed in 1987; and Myerson & Kuhn, which filed last December. ''Heavy Hitter Harvey'' has given way to ''Agent Orange of the legal profession.''

Weight the Only Gain

In its bankruptcy filing, Myerson & Kuhn listed $11 million of debt - all but about $3 million of it covered by receivables. Mr. Myerson has agreed to shoulder $750,000 of the debt, far more than any of his partners. That is on top of the more than $1 million he's anteing up for Finley Kumble. Mr. Myerson has also lost friends, clients and colleagues. Just about the only thing he has gained in the last two years is weight. When the Harvey Myerson story is filmed, a rival gloats, the title role should go to Danny DeVito.

Mr. Myerson's problems don't end there. Federal prosecutors in Brooklyn are investigating his billing and disbursement practices and have subpoenaed all of the Myerson & Kuhn's financial records. They have also questioned at least a dozen of the firm's former lawyers, as well as clients, bookkeepers, computer programmers, secretaries, limousine drivers and travel agents. At issue, according to one official connected to the case, is whether Mr. Myerson turned the firm into ''his own personal candy store.''

Many of Mr. Myerson's former partners speak of him with unremitting bitterness. ''I don't have many nightmares, but he's in every one of them,'' said Steven Kumble, who had encouraged him to join Finley Kumble and is now with Lincolnshire Management Inc. Others, like Mr. Kuhn, who is somewhere in Florida - precisely where isn't exactly clear (see box) - won't discuss him at all.

But for some former colleagues, there is bemusement, intrigue, pity, admiration and even affection with the rancor. They say that the very traits that make him shine in the courtroom - a compulsive desire to succeed, a Ralph Kramden-like tendency to strut, an ability to spellbind and to fervently believe his own pitches - did him in as a legal dynamo.

''I don't hate the guy, but I've called him a 'pathological liar' and I absolutely believe he's one,'' said Leon Marcus, the former partner in Myerson & Kuhn quoted by the American Lawyer. ''He'll tell you a different story about the same thing today, tomorrow, Sunday and Monday, as if he's never told any of them before.''

''Arthur Miller says that 'for a salesman, there is no rock bottom,' '' Mr. Marcus added. ''That's Harvey. He just keeps dropping.''

Undaunted by his defeats, Mr. Myerson is now setting up another firm, one reflecting considerably scaled-down dreams. Unlike the kickoff of Myerson & Kuhn, this time, there were no press conferences, no canned statements from Donald Trump or William Simon, the former Secretary of Treasury. And his new partners are unknowns like Daniel Cooper and Joseph Zelmanovitz rather than more famous figures like Bowie Kuhn. This time, there are no ''drop dead'' Park Avenue offices. But Mr. Myerson claims that most of his clients from Myerson & Kuhn, including the Home Group Inc., the Urban Development Corporation and Paul Bilzerian, have stuck with him.

Doubtful Revival

Still, even the mythical phoenix, to which Mr. Myerson is so often compared, rose only once. And judging from their choice of tense, some of Mr. Myerson's biggest backers appear to have doubts. ''I found Harvey to have an absolutely brilliant mind,'' said Mr. Simon, who introduced Mr. Myerson to Mr. Kuhn. ''He's very quick, can be charming and tough - all the attributes a trial lawyer must possess. Until he appeared to go off the deep end, he had some very impressive clients and did very impressive work for them.''

But far from considering his defunct firm a multimillion-dollar debacle, Mr. Myerson said he accomplished the impossible: He created a ''superstar'' firm of 170 lawyers almost overnight. Myerson & Kuhn could have been a contender, he maintains, but for some treacherous clients, a vicious press, bad luck and a pack of partners who glommed onto him when things were good and cut him off when they soured. He now refers to some of them with language like ''sleazebag,'' ''psychopath,'' ''nut'' and ''needs to be hospitalized.'' Mr. Myerson thinks of himself as a straight-shooting, tell-it-like-it-is guy. That makes the ''pathological liar'' tag hard for him to take. ''I've heard almost that exact quote about General MacArthur,'' Mr. Myerson said. ''I'm not likening myself to him, but I suspect that's said about a lot of leaders when things go wrong.''

A 1964 graduate of Columbia Law School, Mr. Myerson spent his first 20 years of practice at two old-line law firms: Hughes, Hubbard & Reed, and Webster & Sheffield.

Despite advance billing as a ''world-class litigator,'' Mr. Myerson was greeted at Finley Kumble in 1984 with great skepticism. ''Nobody ever heard of the guy,'' one partner grumbled at the time. ''He ain't no Arthur Liman.'' But Mr. Myerson brought in clients like Shearson, the New York State's Urban Development Corporation and Mr. Trump, through whom Mr. Myerson landed his most celebrated case, representing the United States Football League in its Pyrrhic legal victory against the N.F.L.

Quickly, he moved onto Finley Kumble's ''Hall of Kings,'' the wood-paneled corridor where the firm's major rainmakers roosted. By February 1987 he was running the firm - some say into the ground, by being more concerned with his own empire than the institution. Mr. Myerson insists that the seeds of Finley's demise - growing too quickly, borrowing too liberally, hiring too many desiccated rainmakers - were sown long before he arrived.

Even before Finley Kumble filed for bankruptcy, Mr. Myerson was planning his next venture, a firm whose nucleus would be his ''boys'' -the young men drawn by his distinctive mix of good work, fast times and macho camaraderie. All he felt he needed was an establishment name.

Mr. Myerson wooed Mr. Kuhn, who was languishing at Willkie, Farr & Gallagher, by upping his salary to $500,000 a year, from a rather lowly $175,000. ''I thought Bowie had contacts with a whole part of the world very few other people had,'' Mr. Myerson said. Mr. Marcus, his former partner at Myerson & Kuhn, sees it a bit differently. ''Harvey has this thing, this ingrained inferiority complex about being short, fat, Jewish and from Philadelphia,'' he said. ''That he could find someone, even someone as weak and ineffectual as Kuhn, was a great plus for him.''

Mr. Kuhn, whose office was filled with baseball memorabilia, lent credibility and cachet to a firm that might otherwise have been seen as a Finley Kumble clone. But the most persuasive salesman was Mr. Myerson. He promised a ''powerhouse'' of practicing lawyers, with ''hot'' clients and ''major, major'' cases. ''We are going up like a rocket,'' he said.

Among those he won over were Stephen Cabot, a Philadelphia labor lawyer; Faith Ryan Whittlesey, the former American Ambassador to Switzerland, and Michael Horowitz, former counsel to the Federal Office of Management and Budget.

Aping the Boss

''I fell in love with the guy, though I don't know whether he fell in love with me or was simply selling,'' said Mr. Marcus, who for a time even wore the same brash Turnbull & Asser clothes and smoked the same Cuban cigars as Mr. Myerson.

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Mr. Myerson and Mr. Kuhn unveiled their new firm in January 1988. A month later, Mr. Myerson held an extravagant inaugural party at his oceanfront home in East Hampton, Long Island, which he had just purchased for $3.2 million from Donald Marron, the chairman of Paine WebberInc. Each guest received a monogrammed Cartier crystal apple, with gold leaves and stems, engraved with the headline from a Wall Street Journal story on the firm entitled ''A New Legal Powerhouse is Rising.''

But the firm never met Mr. Myerson's lofty projections, although it did earn a healthy $30 million in its first year. Mr. Myerson groused privately about Mr. Kuhn's limited rainmaking. ''When Bowie brings in his next $26 it will be his first $26,'' he would say. But in public, their infatuation continued, with photographs of the two invariably showing them looking lovingly at each other.

By early 1989, cash was low and some partners started missing their draws. But the crunch came in April, when the Myerson & Kuhn's largest client, Shearson, claimed the firm was padding its legal bills. (A similar charge drove Mr. Trump to drop Mr. Myerson.) Shearson demanded a $2 million refund, and the law firm pledged half that. Mr. Myerson insists his firm did nothing wrong, and would not have settled had it been able to afford to fight. In any case, publicity from the dispute, particularly in The Wall Street Journal, scared off clients and triggered investigations by bar association disciplinary officials in Manhattan and the United States Attorney's office in Brooklyn.

As the firm's finances foundered, Mr. Myerson's relations with his colleagues degenerated. Former partners say he engaged in serial deception. They claim he took money from the firm, and upon being discovered, insisted it was for firm expenses; then, after acknowledging that the funds - $518,000 as of last May - were cash advances, failed to reimburse the firm. Some expenses particularly set off his partners: limousine bills, flights on the Concorde and particularly the $86,000 he spent for a diamond ring at Cartier. Tensions rose anew when partners charged that Mr. Myerson placed a check for $125,000 made out to Myerson & Kuhn in his own account. According to his former partners, Mr. Myerson initially said he had returned the check, unendorsed, then admitted he'd deemed it a loan and cashed it.

Mr. Myerson insists he did nothing wrong. Responsible at one time more than 70 percent of the firm's billings, he says, Myerson & Kuhn actually owed him money.

By last fall, an exodus was underway. According to several colleagues, Mr. Myerson grew increasingly harried, distracted and erratic, alternately abusive or weepy, and finally hunkered down in his office, his door locked. Though he boasted of landing several new clients - Sir James Goldsmith, Revlon, Paine Webber - none materialized. His relations with Mr. Kuhn deteriorated, and the two men eventually stopped speaking to one another except through an intermediary, losing touch entirely after the bankruptcy filing.

At Mr. Myerson's new firm, workmen have begun removing the Naugahyde furniture and moth-eaten carpeting bequeathed by the prior tenant. The job should be done, Mr. Myerson quipped, around ''the beginning of my term in Leavenworth.''

Of course, he's only joking. Despite his travails, Mr. Myerson exudes his usual confidence. ''Anyone can start an investigation,'' he said. ''As far as I know, there's not even a gray area.''

In fact, like just about everything else about Mr. Myerson, the work of investigating him is colorful, as even Federal officials admit.

''We've joked about when we should stop the investigation,'' one of them said recently, ''and start writing the screenplay.''

A WAIT OT SERVE BOWIE KUHN

Several times each day, a deputy from the local sheriff's office drives past the million-dollar house at 136 Teal Drive in Marsh Landing, Fla., looking for signs of life. There are a few: two phone lines have been installed and some furniture has been moved in. But to the chagrin of the officer, who has been waiting weeks to serve a summons, the new occupant is nowhere in sight.

The quest for Bowie Kuhn continues. Lawyers for the creditors of Myerson & Kuhn, the former baseball commissioner's bankrupt law firm, have been trying to track him down. But the only peep from Mr. Kuhn has come in a press release, which described his move to the Sunshine State.

In it, Mr. Kuhn mentioned his strong roots in northern Florida: his parents are buried in St. Augustine, his grandparents honeymooned there and another ancestor was the state's first Governor after the Spanish left in 1819. That, Mr. Kuhn explained, plus all of his friends there, made it the ideal place for him and his wife to recuperate from the demise of his firm. ''The decline and ultimate failure of Myerson & Kuhn was a traumatic experience for both of us,'' he stated. ''We both felt a change of environs was a necessity for our happiness and health.''

The creditors offer a different explanation for the sudden sale of his house in New Jersey and relocation to Florida, where residences cannot be seized in bankruptcies: Mr. Kuhn is running from his troubles.

Earlier this month, one of those creditors, Marine Midland Bank, put a lien on Mr. Kuhn's $1.3 million summer home in Quogue, L.I. Two other creditors, Shearson Lehman Hutton Inc. and J. Walter Thompson Inc. are also looking for him. All are apparently thinking along the same lines as Judge Prudence B. Abram of the United States Bankruptcy Court, who is supervising the firm's dissolution.

''If Mr. Kuhn is worth $3 million, Mr. Kuhn has a serious problem in this case,'' she said at a hearing last month. ''If his other partners are insolvent, he bears the full hit.'' There was a second reason, she said, for his vulnerability: ''He chose to lend his name to the firm.''

The New York law firm of Kelley, Drye & Warren, which now represents him, defends his conduct. Lawyers there say that while many of his former partners posture about liquidating the firm's debt, he has come forward with at least $250,000 in cash. Mr. Kuhn, they say, is not hiding; he's just busy. ''I am not aware of anything that says that when a creditor wants to chase you, that you have got to lie down and play dead for them,'' Cory Friedman, a bankruptcy partner at the firm, stated at a hearing on Feb. 13.

The wait continues. But, as a lawyer for one of the creditors noted, Mr. Kuhn is scheduled to give a talk at the New York Public Library entitled ''From Landis to Vincent: A Perspective on Commissioners,'' on May 15th. The lawyer said he'd already circled the date.

COUNTING RETURNS AT THE NEW FIRM

Han Morrissey sits in the reception area of Harvey Myerson's latest law firm, Myerson, Cooper, Stahl & Zelmanovitz, just as she once did at Finley Kumble and then at Myerson & Kuhn. Through all of Mr. Myerson's problems, she has stood - or sat - by his side. ''He's a very fair and decent man, and I feel bad at the way he's always being bashed,'' she said. ''I don't really think a lot of the things he's been blamed for were really his doing.''

For Mr. Myerson, such loyalty from colleagues and clients, is common. ''A less respected person would have been dead by now,'' he said. ''I feel that most people regard me as one of the best lawyers they've ever seen. When someone is in deep trouble, whether Harvey Myerson dresses too flashily or didn't administer his law firm the way Ernst & Whinney would have becomes very unimportant.''

But while old clients stand by Mr. Myerson, will new ones come in? The returns, thus far, are mixed. Some new cases have arrived, including what he called ''a very significant dog fight'' in the securities industry. But he knows that many others, concerned by recent news reports about him, are balking. Still, he said there is plenty to do - and, unlike at Myerson & Kuhn, where he administered hundreds, it's more legal work than paperwork.

''Nobody likes to see his name plastered around as mine has been,'' he said. ''But there's one good thing about the experience: it's forced me to be a full-time lawyer.''

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A version of this article appears in print on February 25, 1990, on Page 3003001 of the National edition with the headline: Can a Tarnished Star Regain His Luster?. Order Reprints|Today's Paper|Subscribe